URGENT CALL FOR REDUCTON IN VAT TO BOOST HOSPITALITY INDUSTRY

19 September 2011

The representative body of the pub trade in Northern Ireland is calling for VAT to be reduced to 5% across the hospitality industry in a bid to boost the struggling hospitality sector and create an estimated 320,000 jobs across the UK.

Pubs of Ulster, which represents the licensed trade in Northern Ireland, is backing the national 'Thrive on 5' petition to reduce VAT to 5% in an attempt to boost the local pub trade and stimulate growth and job creation. The move follows recent research undertaken by Pubs of Ulster which revealed the true state of the industry in Northern Ireland and the difficulties currently facing many publicans, including the threat of closure.

"Our recent survey findings have confirmed that the industry is facing immense economic challenges with most pubs experiencing a downturn in trade and many facing the real possibility of closure. With the entire hospitality sector trying to compete against the Republic of Ireland, which has already lowered its VAT rate, we need real and decisive action to at least match their VAT rate."

Research into the benefits of a reduced rate of VAT has shown that as well as creating jobs, Northern Ireland stands to enhance its tourist offering by becoming a more financially attractive destination for visitors. This will have a significant effect on Pubs as figures show that 80 per cent of tourists visit and 70 per cent eat in a pub during their visit. Research has also shown that whilst the Treasury will lose revenue through a decline in direct VAT, they would make significant gains through additional revenues such as income tax, national insurance and savings on unemployment benefits which will be felt in Northern Ireland.

Colin Neill concludes:

"Research and evidence have shown that a reduction in VAT has the potential not only to help the industry but to support and stimulate its revival. With 21 countries across the European Union adopting a lower VAT rate for the hotel sector and 13 with a lower rate for the overall hospitality sector, it's time that the UK followed suit. The first step however is getting it to the floor of the House of Commons and to do this the petition needs 100,000 signatures. It is therefore vital that there is support from the wider hospitality industry in Northern Ireland, as well as from local MPs and MLAs. We encourage all those with a vested interest in the future of the hospitality industry to get the campaign and sign the petition today.